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What loans options you could look at when in need of funds

BY READERS DIGEST

25th Jan 2022 Managing your Money

What loans options you could look at when in need of funds

Loans have become a common part of today’s life as they offer a reliable way to get money to start a business, pay tuition or accomplish a short term goal.

Whatever your case is, taking a loan can really save you from many situations. However, where exactly should you get loans?

Getting a loan is not always easy, as some lenders might take you through a lengthy process before approving your request. And if you don’t know any other lenders, you might be left wondering where else to get help. If you have been in such a dilemma before, then today is your lucky day. This post will show you the different options you can go to when you need a loan. Let’s dive right in.

Traditional loans

If you are looking for funds to start or boost a small business, getting a bank loan might be a great option. Most banks usually set aside some funds to specifically loan startups. This increases the chances of getting a loan, provided you have a great business plan. Plus, these loans don’t have extreme penalties, which makes them a good fit for starting businesses. You can also take auto loans, construction loans and mortgage products. 

If you don’t want to take a bank loan, you could try payday loans. These loans are usually short term and due by your next payday, hence giving you enough time to repay. However, the loan amount and time given is mostly determined by the lender and your specific location.

Payday loans are usually more flexible and easily accessible due to their fast payouts. However, the interest rates usually vary with lenders, so confirm that fact before applying to ensure you know the exact terms. If these loans sound like a viable option to you, you can check them out from a Payday Loans Online direct lender.

Peer-to-peer lending 

Also called crowdlending or social lending, peer-to-peer lending is the borrowing and lending of money to and from individuals through an online platform.  The platform connects investors and business owners where anyone can pitch their ideas to try and get the attention of an investor. So, there are no intermediaries between you and the investor, meaning you need to prove your trustworthiness. 

To use this method, you must set up a profile on a peer-to-peer lending platform. Your profile must be very professional and convincing as it usually acts as a pitch to investors. Investors will then check out your profile and decide whether your business is worth the risk. If an investor decides to loan you, you will agree on an interest rate and a set amount of time allowed to repay the money. Always keep your word as it helps prove your credibility to the investor and other potential investors.

Credit cards

When in need of funds, the right credit cards can be a lifesaver when you want to buy something but don’t have any cash at hand. But did you also know that you can get a cash advance using your credit card? This is always a great option as it acts as a small loan that you can quickly access anytime you want. Plus, it does not charge high-interest rates like other loan options. However, make sure to always repay your credit debts on time to avoid lowering your credit score. Otherwise, that can easily limit the loan amount you can get even from other institutions as most check your credit score. 

Pitch competitions

Pitch competitions have grown more popular over the years and are a perfect choice for most growing businesses. These competitions usually need small business owners to present their business concepts to investors. The investors then pick a winner and award them a cash prize or capital for their business. 

These competitions mostly need you to be located in a particular area and earn a specific amount. They also mostly focus on established businesses that want to expand or gain more exposure.

Pitch competitions usually happen pretty often, so always make sure to stay alert for any that might be happening in your region. Don’t be discouraged if you lose the competition as another investor might like your idea, and reach out for a collaboration.

Nowadays, there are many loan options you can choose from when looking for some funds for your business or a personal expense. Surprisingly many people don’t know about these loan options or just don’t know how to pick one that best suits their specific business needs. Luckily, this article has discussed some of the best loan options you can find in the market today. Hopefully, you have found at least one loan option that works perfectly for you.

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